Amazon Launches a Discount Store to Rival Temu and Shein
Amazon Plans to Open a Discount Store
Amazon is preparing to introduce a “Budget Store” aimed at offering extremely low-cost items sourced directly from Chinese manufacturers. This initiative, inspired by platforms such as Temu, will present unbranded products at unprecedentedly low prices, like $20 for sofas and $8 for jewelry, with a delivery timeframe of 9-11 days to the U.S.
While these goods are non-returnable, customers will benefit from immediate refunds, making shopping a seamless experience.
How Can the New Amazon Store Impact Current Sellers?
This new marketplace can be a major competition for American brands that sell affordable products on Amazon. The store will be limited in terms of cost and will be based in a fulfillment centre in Guangdong, China, avoiding tariffs.
The products will not be branded, and there will be low price ceilings by category, which will effectively bar most US sellers from this chance.
Amazon’s Answer to China Marketplaces
An Amazon spokesperson noted that the company continually seeks innovative ways to collaborate with its sellers, enhancing customer experiences with a broader selection, lower prices, and increased convenience.
Earlier this year, media reports said the company has been working to launch a low-priced storefront site as it races to counter the competition from discount sites such as Temu and Shein, which have gained popularity because of their ridiculously low prices.
If enacted, the price caps would mark a change in Amazon’s strategy: it has not imposed strict caps on sellers on its platform. This strategy comes at a crucial time as Amazon faces a slowdown in retail sales growth, with online store sales increasing only 5% in the second quarter, a decline from 7% in the first quarter.
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November 28, 2024
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